The purpose of this article is to address some of the basics when planning for MaineCare long-term care. This article is not intended to address all strategies or options when it comes to long-term care. This article focuses solely on the rules to be aware of when considering MaineCare long-term care.

Planning Ahead for Long-Term Care in Maine

Long-term care can be incredibly expensive, and many people worry that needing nursing-home care will mean losing everything they’ve worked for. While the nursing home doesn’t simply take ownership of your property, you may need to use a substantial portion of your assets to pay for care before MaineCare will begin contributing. With advance planning, however, it may be possible to protect some of those assets while still qualifying for help if you need care someday.

Medicare vs. MaineCare

Many people assume Medicare will cover a nursing-home stay. Medicare may pay for a limited period of skilled nursing or rehabilitation, but it generally doesn’t cover ongoing or long-term nursing-home care.

MaineCare, Maine’s Medicaid program, can help pay for long-term care once a person meets certain medical and financial requirements. Until then, the cost of care may be paid from income, savings, long-term care insurance, or other available resources. Depending on how long care is needed, those costs can significantly deplete a person’s savings.

The Five-Year Lookback

When someone applies for MaineCare long-term-care benefits, the State reviews financial transactions made during the previous five years.

Giving money or property to family, adding someone to a deed, or selling an asset for less than its value may be treated as a gift for MaineCare purposes. MaineCare uses the value of the gift to calculate a penalty period. During that time, the applicant may meet the other eligibility requirements, but MaineCare will not pay for the nursing-home care.

The result can be an expensive gap in coverage, with neither the transferred assets nor MaineCare available to pay the nursing-home bill.

Because the rules are complicated, it’s worth checking with an attorney before giving away money, transferring a home, or changing ownership of an asset. Some transfers may qualify for an exception, but those exceptions are vey specific.

Estate Recovery

To qualify for long-term-care MaineCare, a person generally may keep only a limited amount of countable assets. Certain property may be excluded from that calculation, including a primary residence under some circumstances. This means that owning a home won’t necessarily prevent someone from qualifying for MaineCare.

However, even if the home is excluded when determining eligibility, MaineCare keeps track of the amount it pays toward the recipient’s long-term care. After the recipient dies, the State may seek reimbursement from the assets remaining in the recipient’s estate, including the home. For example, if MaineCare paid $100,000 toward the recipient’s care, the State may have a claim against the estate for up to $100,000. MaineCare doesn’t automatically take ownership of the house, but the claim may need to be paid when the estate is settled

This process is called estate recovery. Protections and waivers may apply in certain situations, but a home that wasn’t counted during the owner’s lifetime may still be vulnerable to a MaineCare claim after death.

Protecting Assets

For some families, an irrevocable asset protection trust can help preserve a home or other assets in case long-term care is needed later. Once property has been properly transferred to the trust and the five-year lookback period has passed, it generally won’t be counted when determining MaineCare eligibility or included in the recipient’s estate for recovery purposes.

In exchange for that protection, however, the person creating the trust must give up direct ownership of the property. Because the trust is irrevocable, they cannot simply change their mind and take the assets back whenever they choose. But they do not necessarily give up the ability to use or benefit from the property. They can retain important rights, including the right to remain in the home, receive income generated by trust assets, replace the trustee, and decide who will receive the property after death.

Planning Ahead

If you have a home, camp, land, or other property you’d particularly like to preserve, an asset protection trust might be worth exploring.

Age, health, income, insurance coverage, assets, and family circumstances all affect whether this type of planning makes sense. An attorney can help you weigh those factors and determine whether planning now is appropriate for you and your family.

This process can be complicated and knowing how to navigate our Medicaid system is often best left to your attorney. If you do not have an attorney or if you are interested in a consultation with an attorney from Rune Law, you can find our booking page here.

Protecting Assets when Planning for MaineCare Long-Term Care

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